Evidence is used to the test the usefulness of the model. This is why we call an economics an empirical science.
13. Empirical Science
Empirical meaning that evidence (data) is looked at to see whether we are right.
14. Models of Behavior, Not thought processes
The task at hand is to predict how people will act, which may be quite different from researchers). The people involved in examining thought processes are psychologist and psychiatrics, not typically economists. Positive versus Normative Economics 15. Positive economics
Analysis that is strictly limited to making either purely descriptive statements or scientific predictions; for example, “if A, then B.” A statement of what is. 16. Normative economics
Analysis involving value judgments economic policies; relates to whether things are good or bad. A statement of what ought to be.
Scarcity and the World of …show more content…
Scarcity is the most basic concept in all of economist. Scarcity means that we do not and cannot have enough income or wealth to satisfy our every desire. Scarcity exists because human wants always exceed what can be produced with the limited resources and time that nature makes